RWC hangover hits SkyCity profit

22:54, Feb 12 2013

SkyCity Entertainment Group has reported a net profit of $66.3 million for the six months to December, down 15 per cent on the same time the previous year when the country played host to the Rugby World Cup.

That was off the back of reported revenue of $487.3m, down 1.3 per cent on last year.

The casino and entertainment company said the RWC had boosted revenue in the first half of the 2012 by $11.5m, and excluding that impact growth continued across all its core businesses.

Taking the RWC benefit out, normalised revenue increased 3.8 per cent to $495.7m for the period. Normalised net profit after tax increased 2.9 per cent to $74.4m, the company said.

Companies often like to report normalised results excluding unusual or one-time influences which they claim gives a more accurate picture of performance and SkyCity said its normalised results provided useful data to the investment community. Normalised results typically show a rosier picture.

Including the RWC boost, normalised revenue was up 1.4 per cent for the period and profit down 3.4 per cent.

The lower reported net profit figure was due to the RWC impact, and a below-theoretical win rate in the company's international business, which resulted in a difference of $8.4m.

Chief executive Nigel Morrison said the results were satisfactory given the tough comparative year which included the major sporting event.

"It was always going to be a challenge to outperform the results in NZ last year which benefited from the RWC 2011," he said.

SkyCity remains willing to invest up to $350m in the New Zealand International Convention Centre, and following the pending release of the Auditor-General's report into the government's initial expressions of interest in the project, the company hoped to re-engage with the government, the company said.

SkyCity has announced a new dividend policy which sees an increase in the dividend to a minimum of 20 cents per share per annum, and today declared an interim dividend of 10c in accordance with the new policy, up 11.1 per cent on the same period last year.